Celebrity fragrances: What price, fame?

As the curtain rises on next week's World Perfumery Congress in
France, no doubt the industry's noses and company executives will
discuss Estée Lauder's Sean John and Beyoncé fragrances and Britney
Spears' collaboration with Elizabeth Arden. But what, asks
Louise Sheridan, sparks the decision to involve a celebrity in
the development and marketing of a new product?

Simply put, the perfume industry is big business and celebrity
sells. According to market research company Euromonitor​, the
fragrance industry was worth US$ 22.4 billion (€18.5 bn) last year,
for fragrance sales alone, not including extended product lines. Of
that, premium brands accounted for nearly US$15 billion (€12 bn),
and products with mass-market appeal US$ 7.7 billion (€6 bn).

Everyone is hoping to emulate the success of Glow by J Lo,
launched in 2002 by Coty​'s prestige arm Lancaster. In its first month,
sales of the fragrance amounted to US$18 million (€15 m), which led
Lancaster to forecast US$47 million (€39 m) for the year. Even that
prediction would proved to be an underestimate as sales reached
that level in less than six months.

Another lucrative deal for Coty was its agreement to launch a
perfume with Celine Dion. Sales of Celine Dion Parfums amounted to
US$11.7 million in 2003, making it the ninth-best-selling women's
fragrance of 2003. It was the only debut fragrance line to make the
top 10.

Tapping into the zeitgeist​

But trying to tap into the zeitgeist can be risky, explained Dr
Tony Curtis, a senior lecturer in business policy and international
business at Plymouth Business School. Curtis contributes to a
European cosmetic and fragrance masters course​, which
is offered jointly with the Versailles Perfumery School at the
University of Versailles.

"You have to look at the platforming, the marketing of the
fragrance. It isn't a simple formula. If you get it right, the
whole package, not just the odour, for the company it's the
equivalent of winning the lottery. But it's about as scientific as
putting money on horses. A couple of hundred new perfumes are
launched every year in the UK but few of these products succeed,
it's only every now and again that one of these products will turn
into a classic."​

How does one determine success and failure?​

Fragrance consultant and chairman of the Fragrance Foundation UK
John Ayres​
said: "More than 200 new perfumes were launched in the UK last
year, and more than 300 worldwide. Since 1990, each year has
witnessed an additional 20-30 new launches on the previous year's
figures. The success or failure of these products is relative. It
depends on the company's business objectives."​

One of the most recent examples of this is Burberry Brit, which
has exceeded the objectives that were set in the business plan. But
trying to learn lessons when a new product launch does not achieve
its targets is not so easy, as Ayres pointed out: "Companies are
quite happy with their successes, but they want to forget their
failures."​

A lot rides on the marketing and advertising, which by its very
nature in the fragrance industry is aspirational. "When you
bring in a celebrity, it is a bit of a risk,"​ conceded Ayres.
Just as it is difficult to obtain any facts and figures relating to
the success or failure of fragrance launches, it's equally
difficult to try and quantify the celebrity factor.

So: What price, fame?​

Attributed to Benjamin Franklin, "What price, fame?" was
originally intended as a comment on the evils of fame, but
cosmetics and fragrance companies seem to be taking the comment
literally, asking the latest rising stars in the music and acting
worlds to name their price and sign on the dotted line.

Plymouth Business School's Dr Curtis compared the process of
launching a fragrance to individuals starting up in business. He
pointed out that, statistically, more than two thirds of new
businesses end in failure. People buy into franchises because of
the safety factor; the associated risks are not so great.

The same applies when a company launches a new fragrance. While
there is a risk, collaborating with a celebrity effectively enables
the company to buy into the celebrity's franchise, to capitalise
upon an existing brand and reduce the risk. But even then success
is not guaranteed.

"It has to be a totally integrated mix,"​ said Curtis.
"The package, the odour, the message and the halo of celebrity
endorsement, they all have to be right. It is an olfactory message,
but it's got to be as one with the rest of the mix."​

"People are looking for a lifestyle, whether it's sunglasses
or a car or a bottle of perfume, and celebrity endorsements are
part of that lifestyle that's being offered. In part, it's being
aware of who people aspire to want to be like -- David Beckham is a
good example of this,"​ he added.

But, Curtis cautioned: "It's not necessarily enough to just
tack on a name. It's much more likely to happen if there is total
integration, it's a complete product mix, because people aren't
just buying the perfume, they are buying the lifestyle."​

One can see the attraction for Estée Lauder in trying to sell
the 'Sean John' lifestyle, because it appears to be a lifestyle
that many people want to buy into. Established five years ago, Sean
Combs' Sean John Clothing is now one of the most successful lines
created by a music star, racking up retail sales of US$300 million
(€250 m) last year alone.

But if a company like Estée Lauder rides on the coat-tails of
stars on the way up, does it not stand to slide with them on the
way down? And how does the company's more classic image fit with
the 'bling bling' world of hip hop and rap artist Sean 'P Diddy'
Combs -- is Estée Lauder not in danger of alienating some of its
existing clientele?

Euromonitor's IMIS account manager for cosmetics and toiletries
Claire Briney thought not. "Estée Lauder is quite good at
keeping its brands separate, for example they've managed to do this
will both Stila and Jo Malone. They buy a brand and help it
develop, but keep its niche appeal."​

The market for a Sean John fragrance line should appeal to
young, male consumers, both of which are growing markets. Briney
said that launching fragrances at a teenage market dates back to
1996 when Nina Ricci launched La Belle de Ricci, the first premium
product specifically targeted towards teenagers. "Teenagers can
spend and will spend,"​ she added.

And they do. In fact, according to Euromonitor, in 2003, the
market for premium products grew by 3 per cent, and mass-market
products 4.4 per cent and the growth rate for fragrance sales
continues to rise. As for the celebrities, only time will tell
whether today's fragrance endorsement amounts to a fleeting top
note, or a more enduring money-making base note.